Outsource Learnings

In the fast paced global economy, organisation’s business issues are ever changing.

Organisations, irrespective of their size, status, sector, or location, require adaptability in order to maintain profitability, sustain growth and uphold competitive advantage. They have been changing to make themselves more agile, throwing away previous ways of working that historically helped them succeed.

One way organisations have adapted is adopting Outsourcing as a successful business strategy. Outsourcing has, in many cases, provided organisations with business flexibility, in terms of focusing on their core competencies, while at the same time offering them cost-effective solutions for their increasingly demanding business requirements.

Outsourcing offshore (APAC region for UK organisations) and near shore (Eastern Europe, Canada, South America, South Africa) provide all the typical benefits of outsourcing and may deliver additional value in resource availability, maintaining quality, and improved time-to-market, and lower cost. Obviously dependent on the location and quality of the services provided. [Obviously distance and time zones also increase complexities in making things work]

Outsourcing does provide more manpower and specialised knowledge for projects. It helps in accessing additional capacity on demand, especially when resource demands could impact the organisation. For technology projects you often get quicker integration of diverse technologies, speedy application development and prompt delivery times.

It is not all a rosy picture. Despite all the favourable arguments outlining the merits of outsourcing there are additional challenges organisations face. These inherent issues need careful consideration.

One of the foremost issues is loss of managerial control. This is more evident for large, complex projects that will go on for long durations. A “hands off” approach often endorsed by vendors should be avoided.

Exercising control on an outsource vendor’s day-to-day functioning is very difficult. Sometimes even getting honest feedback on the manner in which project is progressing is tough enough. Typically the relationship “creates” vast communication gaps over the life of the project that are too difficult to bridge. But not overcoming this “handicap” early on, can only lead to serious issues, potentially leading to time and cost over-runs, a less than satisfactory deliverable emerging at the end.

Such incidents end up impairing the outsourcing collaboration!

While it is difficult to exercise control on a third party, a collaborative approach is imperative. A vendor that supports an open and accommodative working culture is more likely to succeed. Throw in strong project management and effective relationship management from the customer’s side, plus constant delivery assurance. These elements will only help the progress of the outsourced activity and should facilitate success. Miss them out at your peril!

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